Tax Deductions in Your Silhouette or Cricut Business

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As we continue on talking about taxes on the blog (see this post and this post if you are a bit behind), we are going to look at a list of common tax deductions in your Silhouette or Cricut business.

Tax deductions are expenses that your business has encountered throughout the year. You use deductions to reduce the taxable income that your business has had throughout the year – thus allowing you to pay less in taxes at the end of the year.

Two Kinds of Deductions

For some deductions, you take the entire value of the deduction at one time; while others you take a portion of the deduction over several years. For example, you may take a deduction of $40 for vinyl you recently purchased. However, since you will continue to use your machine throughout several years, your machine depreciates and you take smaller deductions over the useful life of your machine.

Common Tax Deductions in Your Silhouette or Cricut Business

  • Supplies – Vinyl, paper, glue, transfer tape, weeding tools, blank products, and so on.
  • Machines – Cameo, Curio, Mint, Cricut, Alta, Glowforge, heat press, postage scale or printer, computer you purchased for business use, or camera and related photography equipment.
  • Software – Like Silhouette Studio Designer or Business Edition Upgrade, fonts, and designs.
  • Books – Any book you’ve purchased to better your business or to improve your skills (like Diving In: 30 Days to Your Silhouette Business – shameless plug to one of my books).
  • Insurance – Business insurance.
  • Event Entry Fees – Like those from craft shows or fairs.
  • Home Office Overhead – The space in your home you use for your business, internet, electricity, water.
  • Legal Fees – These include attorney fees from setting up your business, trademarking your designs, registering copyrights.
  • General Office Supplies – These would include envelopes, tape, pens, pencils, tacks, staples, file folders, and so on.
  • Postage and Shipping Supplies – Don’t forget about boxes, envelopes, tape, packing peanuts, bubble wrap, and labels.
  • Advertising Expenses – Including promoted listings on Etsy, Pinterest, Facebook, Google Adwords, and print materials including business cards or post cards.
  • Tax Preparation Expenses
  • Accounting Expenses – Including monthly accounting subscription, or the costs related with hiring an accountant.
  • Phone expenses – Cell phone bills, phone, phone apps for your business.
  • Travel Expenses – You can deduct things like gas, lodging, food.
  • Start Up Costs – Usually, you can deduct up to $5,000.
  • Credit Card Processing Fees
  • Display Materials and Photography Props
  • Charitable Donations – This includes product donations for fundraisers.
  • Health Insurance Premiums
  • Childcare Expenses.
  • …most things that you have purchased for use in your business can be taken as a tax deduction.

Whew, that’s a lot of deductions! When taking deductions related to your Silhouette or Cricut business, the IRS will not ask for copies of each receipt. However, you are required to keep your receipts on file, either digitally or hard copies. Personally, I keep paper records in binders.

Tax Deductions in Your Silhouette or Cricut Business Craft Business - by cuttingforbusiness.com

10 thoughts on “Tax Deductions in Your Silhouette or Cricut Business”

  1. Thank you for doing these tax posts! It all gets a bit overwhelming since I’m starting out and have no idea what to do! My mother owns her own business, but it’s in the food industry, so she can only help so much!

    1. You are welcome Sondra! I agree, it can be a little overwhelming. Once your taxes are filed, be sure to treat yourself to something nice – it’s a job well done! Christine

  2. Large Marge the Party Barge

    I keep my receipts in evernote. I try to keep paper receipts but had a dodgy printer for a bit and ‘lost control’. New printer means I’ll be printing out all those old receipts too and keeping them on file. I organize my year and month in evernote. I’m not a big business at all, but it’s still seems overwhelming at times… especially ordering something on amazon that’s a ‘few bucks’… it’s easy to forget. Well, those few bucks add up to big bucks sometimes.
    I do have a business account with my bank that I use for nearly all business purchases, but I’ve had to use my personal account to buy a computer on sale at WOOT!.. an amazon company. It was a good deal, but now I think it looks fishy I transferred $2k to my business account and then immediately paid out $1350 for the computer to my personal account. It’s a legit business expense, I just didn’t have enough in my business account to buy it and no time for the transfer to complete to use my business account. (it was like a 12 hour sale).

    I’m so appreciative of this information. I didn’t know that I could deduct vinyl as bought… I thought it had to be treated as an asset until sold. It’s these simple things that can be really confusing to newbies.

    You have made my tax life so much easier and MUCH more rewarding.

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